Can the cloud revive manufacturing?

BERKELEY, Calif – Cloud computing could help usher in the next wave of technological innovation and, with it, provide a new engine for economic growth, say the authors of a forthcoming study on the emerging cloud computing ecosystem.

John Zysman, coauthor of the cloud study and co-director of the Berkeley Roundtable on the International Economy here, argues that “cloud-enhanced services” promise to take up much of the economic slack caused by the steady shift over the last several decades from manufacturing to services. Despite the loss of those U.S. manufacturing jobs, “direct linkages” persist between high value-added services and manufacturing, Zysman said in an interview.

In a 1987 book, Zysman and coauthor Stephen Cohen argued that manufacturing remains fundamental to economic growth and that service sector jobs only complement rather than replace critical manufacturing employment. “Manufacturing matters mightily to the wealth and power of the United States,” Zysman and Cohen declared in Manufacturing Matters: The Myth of the Post-Industrial Economy. “You can’t control what you can’t produce.”

In the interview, Zysman posited that “ICT-enabled services are produced” and that "the transformation of the services sector" would be achieved by “embedding ICT-enabled services in manufactured products to create distinctive value.” For example, a manufacturer of construction cranes could embed intelligence into its products in order to compete with Chinese crane makers in markets like providing port management services.

Zysman and his coauthors update the competitive landscape in the new survey, stressing the enormous economic potential of cloud computing, particularly for network providers seeking to add value to the services they deliver via the cloud. Adding value in the production process or in the brave new world of delivering “cloud-enhanced services” is seen as a major competitive advantage for Western economies as they compete with Asian manufacturing powerhouses like China.

“We contend that cloud computing is historically unique by simultaneously being an innovation ecosystem, production platform and global marketplace,” concludes the study, compiled by UC-Berkeley professor Zysman, Kenji Kushida of Stanford University and Jonathan Murray, a former Microsoft executive now with Warner Music Group. “Manufacturing is a piece of production,” Zysman said in the interview. “Google services are produced.”

(A possible caveat in the authors’ enthusiasm for cloud computing may be tempered by the fact that their study was funded in part by networking giant Cisco Systems and Microsoft, two companies with enormous stakes in the success of cloud computing.)

Government agencies, for their part, are seeking to leverage the economic benefits of an offshoot from cloud networks called “big data." The National Science Foundation (NSF) announced a $200 million research initiative on March 29 to study the economic impact of big data, an extension of what has been dubbed the Internet of Things.

“Data, in my view, is a transformative new currency for science, engineering, education, commerce and government,” Farnam Jahanian, head of NSF’s computer and information science and engineering directorate,” told the New York Times.

http://www.manucloud-project.eu is another example. I believe that our only survival is in patents , carbon footprint tax, disclosure statement on social responsibility by Global companies. Manufactured products will have to be supplied through the provision of services where product-service at the end of their life cycle will have to be fully recycled. You can also motivate consumers and politicians in buying local if you fund their retirement or healthcare through that schema ... no motivation no result !

Preserving the earth must be our major priority for green energy and energy saving and the points explained in the post are clear and all are proving . My point is that cloud computing is still not yet developed enough , though it is very advantageous for business management in term of work effectiveness and management cost ; However; since I have read some stuff about cloud computing security herein http://cloudswave.com/blog , plus some expert point of view here in the discussion, i become somewhat septic to invest in,so to what extent it is safe for data storing , so which are the best reliable companies affording quality services ,

If anything, the cloud might be the very thing industry needs to suck IT and creative jobs out of the US and spread among talented people all around the world.
It would be to IT what cheap oil prices and transportation systems are to manufacturing.

I don't see how "the cloud can usher in the next wave of technological innovation and provide a new engine for economic growth". The cloud is the latest extension and implementation of the Internet revolution. Services continue to be developed and resources provided without regard to geographical boundaries. Some economies of scale are achieved with virtualization techniques that reduce the resources required to grow capabilities. I see the cloud as an evolutionary change, not a revolutionary one.

Bob: Ex-cyber warfare czar Richard Clarke is very concerned about IP security in the cloud. See here:
http://www.nytimes.com/2012/04/03/opinion/how-china-steals-our-secrets.html?scp=2&sq=Richard%20Clarke&st=cse

Does anyone have concerns about security of IP in the cloud? Let's see: let me take a bunch of Faberge eggs, put them all into a basket located I-don't-know-where, operated by who-knows-who, and just sit back and relax. Um.
Mark Twain said that it was stupid to put all of your eggs in many different baskets, right? But he also added, "but watch that basket." This is the difficulty with the cloud: there's nothing to watch. You must depend upon unseen agencies to insure privacy and integrity of your property.

This is precisely the type of cloud application Zysman, et al, believe will give innovative tech companies in the West a competitive edge. You leverage the cloud to add value during production --Zysman argues that even services are "produced." It's not manufacturing, per se, but we probably do need to start thinking about "production" in different ways. The bottom line is that if what you are producing also produces jobs with decent wages and a future, then it's a good thing.

Your point #3 is what I was thinking of when I said "embedded intelligence and connectivity" -- Siri is a great example, getting her information from the cloud.
And to answer your question about what happens when you lose the link, I think iPhone 4s users already know. Siri says "There's a problem. Try again later."
That's a euphemism for "the Siri servers are overloaded right now and I can't get the information you asked for."